An Analysis of H.R.1 (119th Congress), the "One Big Beautiful Bill Act": Fiscal Consequences and Programmatic Restructuring
1. Executive Summary
The House of Representatives passed H.R.1, formally titled the "One Big Beautiful Bill Act," on May 22, 2025.1 This budget reconciliation bill aims to address the impending expiration of provisions from the 2017 Tax Cuts and Jobs Act (TCJA), alongside proposals for defense spending, reforms to social programs, and other significant policy adjustments.1
A central finding of this analysis, supported by estimates from the Congressional Budget Office (CBO) and other non-partisan entities, is that H.R.1 is projected to substantially increase the federal deficit and national debt over the fiscal year 2025-2034 period. Estimates of this increase range from $2.4 trillion to $5.7 trillion, depending on the specific assumptions and scope of the analysis.1 The bill's fiscal trajectory is characterized by significant tax reductions and increased expenditures in areas such as defense and border security. These are juxtaposed with considerable spending cuts and the imposition of stricter eligibility requirements for major social programs, notably the Supplemental Nutrition Assistance Program (SNAP) and Medicaid.1 Furthermore, the legislation includes provisions to roll back clean energy incentives previously enacted.1
The programmatic shifts embedded within H.R.1 are anticipated to have direct consequences for individuals, including a projected increase in the number of uninsured Americans primarily due to alterations in Medicaid eligibility and funding.1
The legislation, despite its aspirational title, presents a complex fiscal picture. While the name "One Big Beautiful Bill Act" 1 might suggest universally positive reforms, the underlying data point towards a significant long-term fiscal cost. This cost stems primarily from extensive tax cuts, particularly the extension of TCJA provisions, and heightened spending in security-related domains.1 Concurrently, the bill curtails social safety nets like SNAP and Medicaid and reverses environmental initiatives.1 This pattern of funding reallocation indicates a deliberate policy direction aimed at reducing the fiscal footprint of certain government functions while expanding others and lowering overall tax burdens, especially for specific segments of taxpayers. The very consideration of an amendment to rename the bill the "Tax Awards for eXecutives, Stealing from Children And Medicaid Act" or the "TAX SCAM Act" 6, though likely unsuccessful, underscores the contentious perception of the bill's priorities and impacts.
2. H.R.1 - The "One Big Beautiful Bill Act": An Overview
H.R.1 was introduced in the 119th Congress by Representative Jodey Arrington (R-TX) on May 16, 2025, and is formally known as the "One Big Beautiful Bill Act".1 The bill navigated the legislative process in the House of Representatives, culminating in its passage on May 22, 2025, by a narrow vote of 215–214–1, reflecting a division largely along party lines.1 This legislation is framed as a reconciliation measure, pursuant to House Concurrent Resolution 14, which provides it with certain procedural advantages in the Senate.1
While a singular, explicitly stated objective for H.R.1 is not always clearly articulated in official summaries 6, its comprehensive nature allows for the inference of several key goals. These include the extension of tax provisions from the Tax Cuts and Jobs Act of 2017 that are set to expire, a reduction in non-military government spending, an increase in funding for defense and border security, reforms to social welfare programs primarily through the imposition of stricter eligibility criteria, and a scaling back of clean energy initiatives enacted under previous legislation.1 The legislative record also indicates numerous proposed amendments, particularly from Democratic members, which sought to counteract what were perceived as detrimental cuts to social programs and environmental protections, or to reverse proposed deregulation.6
The scope of H.R.1 is exceptionally broad, impacting nearly every significant area of federal policy. Its provisions span:
Taxation: Affecting individual income taxes, corporate taxes, international tax regimes, and estate taxes.
Social Welfare: Introducing changes to SNAP, Medicaid, the Child Tax Credit, federal education funding and student aid, and child care support.
National Security: Allocating substantial new funding for the Department of Defense and for Homeland Security, with a particular focus on border enforcement.
Agriculture: Modifying farm support programs and conservation initiatives.
Energy and Environment: Revising policies related to energy production and environmental regulation, including the rollback of certain clean energy tax incentives.
Government Operations: Impacting federal employee retirement benefits (specifically FERS) and introducing federal-level stipulations regarding state regulation of artificial intelligence.
The selection of the budget reconciliation process for a bill of such sweeping policy magnitude is a significant strategic choice. Reconciliation allows for the passage of legislation with a simple majority vote in the Senate, thereby bypassing the 60-vote threshold typically required to overcome a filibuster. This procedural pathway is designed for legislation that has a direct impact on federal spending and revenues. Given that H.R.1 contains a vast array of provisions touching numerous committee jurisdictions and policy domains 1, many of which are highly contentious, enacting such a broad agenda through regular legislative order would present formidable challenges. The use of reconciliation, therefore, signals an intent to implement a comprehensive and potentially transformative set of policies by leveraging its procedural advantages, suggesting the bill's content is primarily shaped by the priorities of the majority party.
3. Fiscal Impact Assessment: H.R.1 and the Federal Deficit
The Congressional Budget Office (CBO) and several non-partisan fiscal analysis organizations have projected that H.R.1, the "One Big Beautiful Bill Act," will lead to a substantial increase in the federal deficit and national debt over the ten-year budget window of FY2025-FY2034. The Committee for a Responsible Federal Budget (CRFB) estimates that the bill would add $2.4 trillion to primary deficits, or $3.0 trillion when including the associated interest costs on the increased debt.3 Other analyses, referencing preliminary CBO data, suggest an even larger impact, with potential additions to the national debt ranging from $3.8 trillion to as high as $5.7 trillion over the decade.1 The official CBO cost estimate for H.R.1, released on June 4, 2025, and available at https://www.cbo.gov/publication/61461, serves as the definitive projection for the bill's budgetary effects.7
The primary drivers of this projected deficit increase are twofold: extensive tax cuts and significant new spending initiatives. The extension and, in some cases, expansion of individual and business tax provisions originally enacted in the 2017 Tax Cuts and Jobs Act (TCJA) represent the largest single contributor to the increased deficit. According to CRFB's analysis of CBO data, these TCJA extensions account for a deficit increase of approximately $3.9 trillion for individual provisions and $270 billion for business provisions over ten years.3 Further new tax cuts proposed in the bill add an estimated $662 billion to the deficit over the same period.3
On the spending side, H.R.1 allocates substantial additional resources to national security. The Armed Services Committee title is projected to increase the deficit by $144 billion, while the Homeland Security Committee title, largely focused on border security, contributes another $79 billion to the deficit.3 The agricultural sector is also slated for increased funding, with a projected rise in spending of $56.6 billion over the decade.8
While the bill does include some offsetting provisions intended to reduce the deficit, these are insufficient to counterbalance the cost of the tax cuts and new spending. Notable offsets include the repeal or reform of various Inflation Reduction Act (IRA) energy tax credits (projected to save $191 billion from EV credits, $249 billion from energy investment/production/manufacturing credits, and $131 billion from other IRA credits), the imposition of a foreign corporate retaliation tax (+$116 billion), and reductions in Affordable Care Act (ACA) overpayments and payments to immigrants (+$237 billion).3
The following table, based on CRFB analysis of CBO data and other budgetary estimates, provides a breakdown of the projected deficit impact of H.R.1 by major committee or category for the fiscal years 2025-2034.
Table 1: Projected Deficit Impact of H.R.1 by Major Category/Committee (FY2025-FY2034)
| Committee/Category | Deficit Increase (-) / Decrease (+) (Billions of Dollars) | Source(s) |
|---|---|---|
| Ways and Means Committee (Net) | -$3,754 | 3 |
| * Extend & Expand TCJA Individual Provisions Subtotal* | *-$3,899* | 3 |
| * Revive TCJA Business Provisions Subtotal* | *-$270* | 3 |
| * New Tax Cuts and Spending Subtotal* | *-$662* | 3 |
| * Offsets Subtotal (Repeal IRA credits, new taxes, etc.)* | *+$1,079* | 3 |
| Armed Services Committee (Net) | -$144 | 3 |
| Homeland Security Committee (Net) | -$79 | 3 |
| Agriculture-Facing Programs (Net Increase) | -$56.6 | 8 |
| Judiciary Committee (Net from Fees) | +$64 (approx. sum of listed fees) | 3 |
| Other Unspecified Changes / Interest Costs (leading to total deficit impact) | Varies by estimate | 1 |
| Estimated Total Net Deficit Impact (Primary Deficit, CRFB) | -$2,400 | 3 |
| Estimated Total Net Deficit Impact (Including Interest, CRFB) | -$3,000 | 3 |
| Alternative Total Net Deficit Impact Range (Various Sources) | -$3,800 to -$5,700 | 1 |
Note: The table uses CRFB's breakdown which is based on CBO scoring. "Other Unspecified Changes / Interest Costs" reflects the difference between the sum of committee-level details and overall deficit estimates which include interactions and interest. Judiciary Committee impact is an approximation based on listed fee revenues.
The substantial projected increase in the federal deficit under H.R.1 is not primarily attributable to temporary stimulus measures or emergency spending, which have characterized deficit spikes in other recent periods (e.g., the COVID-19 pandemic). Instead, the increase stems largely from proposed long-term alterations to tax policy, such as making many of the TCJA tax cuts permanent or expanding upon them, and from sustained increases in funding for specific areas like defense and border security.1 These are fundamental changes to the underlying structure of federal revenues and expenditures. While some new tax relief measures are temporary (e.g., the exemption for tip income through 2028 2), the core TCJA extensions have a decade-long scoring window and imply a lasting shift. The offsetting revenue measures, derived mainly from repealing prior clean energy incentives, are not projected to be sufficient to counteract these structural changes.3 Consequently, the bill appears poised to reshape the federal government's long-term fiscal baseline, leading to a persistently higher deficit trajectory compared to a scenario where current laws (including TCJA expirations) remain unchanged.
4. Transforming Government: Programmatic Shifts and Funding Reallocations under H.R.1
H.R.1 proposes a significant realignment of federal priorities, evident in its approach to both revenue collection and expenditure allocation. The legislation enacts a broad tax policy overhaul while simultaneously redirecting federal spending, leading to substantial changes in the scope and funding of numerous government programs.
A. Tax Policy Overhaul and Revenue Implications
The "One Big Beautiful Bill Act" introduces sweeping changes to the U.S. tax code, largely centered on extending and modifying provisions from the 2017 Tax Cuts and Jobs Act (TCJA), introducing new tax reductions, and repealing certain tax incentives, particularly those related to clean energy.
Extension and Expansion of TCJA Provisions:
A cornerstone of H.R.1 is the extension of many TCJA individual income tax provisions that are currently set to expire. This includes maintaining lower individual income tax rates, with a projected 10-year revenue loss of $2,177 billion.3 The bill also extends the increased standard deduction (costing $1,308 billion) and the repeal of the Alternative Minimum Tax (AMT) for taxpayers with incomes below $1 million (costing $1,304 billion).3 The Child Tax Credit is increased to $2,500 per child through 2028, then reverts to $2,000, with an estimated cost of $797 billion.1 The higher estate tax exclusion is also extended, reducing revenues by $212 billion.2
A notable and complex change involves the State and Local Tax (SALT) deduction cap. H.R.1 increases the cap from $10,000 to $40,000 for individuals with income below $500,000. However, it also includes provisions to limit workarounds and imposes restrictions for high-income taxpayers. The net effect of these SALT cap modifications is projected to increase federal revenues by $787 billion over ten years relative to certain baselines, making it a significant, though often counterintuitive, revenue raiser within the bill's tax title.1
For businesses, the bill extends and expands the Section 199A pass-through deduction, costing $820 billion.2 It also revives 100% bonus depreciation through 2029 (costing $37 billion), allows for domestic Research and Experimentation (R&E) expensing through 2029 (costing $23 billion), and reinstates a looser limit on interest deductibility (costing $40 billion).2
New Tax Cuts:
Beyond TCJA extensions, H.R.1 introduces several new tax relief measures. These include exempting tips and overtime pay from federal income tax through 2028, at a combined cost of $164 billion ($40 billion for tips, $124 billion for overtime).1 A higher standard deduction for seniors is established through 2028 (costing $66 billion), and interest on certain car loans is made deductible for the same period (costing $58 billion).2 The bill also expands Health Savings Accounts (HSAs) (costing $44 billion), establishes "Trump Accounts" or "MAGA" savings accounts for parents (costing $17 billion), creates a new scholarship tax credit (costing $20 billion), and allows for the expensing of factories (costing $148 billion).1
International Tax and IRA Rollbacks:
The bill modifies international tax provisions, including GILTI (Global Intangible Low-Taxed Income) and FDII (Foreign-Derived Intangible Income), resulting in a net revenue loss of $165 billion, and makes changes to the BEAT (Base Erosion and Anti-Abuse Tax).2
A significant source of offsetting revenue comes from the rollback of clean energy provisions enacted in the Inflation Reduction Act (IRA). H.R.1 repeals Electric Vehicle (EV) tax credits (saving $191 billion), phases out energy investment, production, and manufacturing credits (saving $249 billion), and repeals or reforms other IRA credits (saving $131 billion).1
Table 2: Estimated Revenue Impact of Key Tax Provisions in H.R.1 (FY2025-FY2034)
| Tax Provision Category | Revenue Change (Billions of Dollars) | Source(s) |
|---|---|---|
| TCJA Individual Provision Extensions (Net Cost) | -$3,899 | 3 |
| * Extend & Expand Rate Cuts | -$2,177 | 3 |
| * Extend AMT Repeal (<$1M Income) | -$1,304 | 3 |
| * Extend & Expand Standard Deduction Hike | -$1,308 | 3 |
| * Extend & Expand Child Tax Credit Increase | -$797 | 3 |
| * Extend & Expand Estate Tax Cut | -$212 | 3 |
| * Extend $10k SALT Cap, Increased to $40k (Net Savings) | +$787 | 3 |
| TCJA Business Provision Extensions (Net Cost) | -$270 | 3 |
| * Extend & Expand 199A Pass-Through Deduction | -$820 | 3 |
| * Revive Bonus Depreciation through 2029 | -$37 | 3 |
| * Revive Domestic R&E Expensing through 2029 | -$23 | 3 |
| New Tax Cuts (Net Cost) | -$662 | 3 |
| * No Tax on Tips Through 2028 | -$40 | 3 |
| * No Tax on Overtime Through 2028 | -$124 | 3 |
| * Allow Expensing of Factories through 2028 | -$148 | 3 |
| Repeal/Reform of IRA Clean Energy Credits (Net Savings) | +$571 | 3 |
| * Repeal EV Tax Credits | +$191 | 3 |
| * Phase Out Energy Investment, Prod. & Mfg. Credits | +$249 | 3 |
| * Repeal or Reform other IRA Credits | +$131 | 3 |
| Other Offsetting Tax Provisions (Net Savings) | +$220 | 3 |
| * Foreign Corporate Retaliation Tax | +$116 | 3 |
| * Increase College Endowment Tax | +$23 | 3 |
| * Impose Remittance Excise Tax | +$26 | 3 |
| Net Impact of Ways and Means Committee Provisions | -$3,754 | 3 |
The pattern of tax changes in H.R.1 reveals a distinct policy orientation. The legislation shows a strong preference for broad-based tax relief, exemplified by the extension of individual income tax rate cuts and the increased standard deduction.3 It also introduces new tax benefits tied to specific types of income, such as tips and overtime, or expenditures like car loans.2 This approach contrasts sharply with the bill's treatment of targeted tax incentives, particularly those established by the Inflation Reduction Act to promote clean energy and address climate change. H.R.1 actively curtails these targeted incentives, generating significant revenue offsets in the process.1 This shift suggests a view of the tax system less as a tool for incentivizing specific economic activities or social goals (like green investments) and more as a mechanism for general tax burden reduction, with a focus on consumption-related relief and broad rate cuts.
B. Spending Priorities: Realigning Federal Expenditures
H.R.1 enacts a significant realignment of federal spending priorities, characterized by increased investment in national security and agriculture, juxtaposed with substantial constraints and reforms in social welfare programs.
Social Programs Under Pressure:
Major social safety net programs face considerable changes under H.R.1, primarily through stricter eligibility requirements and shifts in financial responsibility.
Supplemental Nutrition Assistance Program (SNAP): The bill mandates significant cuts to SNAP. These are achieved by tightening eligibility criteria and notably by shifting 5% of SNAP benefit costs and 75% of the administrative costs to state governments.1 An amendment (Amdt 29 by Rep. Craig) sought to strike $313 billion in proposed food assistance cuts, indicating the potential magnitude of reductions considered within the bill's framework.6 Furthermore, H.R.1 aims to eliminate the Broad-Based Categorical Eligibility (BBCE) loophole (Amdt 486 by Rep. Cloud), which has allowed some households to qualify for SNAP based on eligibility for other assistance programs.6
Medicaid: The legislation introduces work requirements for Medicaid recipients for the first time. The CBO estimates that this provision alone will cause 5.2 million individuals to lose Medicaid coverage by 2034.1 Other changes include increased cost-sharing for recipients with incomes above the federal poverty line, new and more frequent verification requirements for eligibility (redeterminations every six months for some), and prohibitions on Medicaid funding for non-profit organizations that provide abortion care, as well as for gender-affirming care.1 Overall, the CBO projects that the Medicaid provisions in Title IV of H.R.1 will increase the number of uninsured Americans by 7.8 million in 2034. When combined with other health insurance-related provisions in the bill, H.R.1 is estimated to increase the total number of uninsured people by 10.9 million in 2034.4
Education: H.R.1 alters federal student aid by increasing eligibility requirements for Pell Grants, though it also introduces Workforce Pell Grants aimed at students in trade schools. Critically, it ends Federal Direct subsidized loans for undergraduate students and eliminates the Secretary of Education's authority to regulate educational institutions based on "gainful employment" metrics for their graduates.1 Numerous Democratic amendments, such as Amdt 304 (striking termination of interest-free undergraduate loans), Amdt 327 (striking repeal of borrower defense rule), Amdt 383 (striking capping of student aid at median cost), and Amdt 397 (striking changes to income-driven repayment plans), attempted to mitigate these impacts.6
Child Care & Child Tax Credit: While H.R.1 extends the increased Child Tax Credit of $2,500 per child through 2028 1, other proposed enhancements, such as making the credit fully refundable or disbursing it through advance monthly payments (reflected in Amdts 6, 20, 251, 265, 267 6), were not incorporated, highlighting differing policy priorities regarding the scope and structure of child-related tax benefits.
Federal Employees Retirement System (FERS): The bill includes a provision to eliminate the FERS annuity supplement for most newly retiring federal employees. This supplement is intended to bridge the income gap for those who retire before becoming eligible for Social Security. The CBO estimates this change will reduce direct spending by $10.0 billion over the 2025-2034 period.9
Bolstering National Security:
H.R.1 directs a significant increase in resources towards national security.
Defense: The bill allocates an additional $144 billion to $150 billion for defense spending over the next decade.1 Specific areas of investment include shipbuilding (projected -$32 billion impact on deficit), air superiority and missile defense (-$30 billion), munitions and supply chain enhancements (-$19 billion), development of new low-cost weapon systems (-$13 billion), and nuclear deterrence (-$13 billion).3
Border Security: Funding for border security is substantially increased, with allocations ranging from $70 billion to $79 billion.1 Key expenditures include border wall construction and improvements to border security facilities (-$50 billion impact on deficit), reimbursement to states for border security expenses (-$12 billion), and funding for U.S. Customs and Border Protection (CBP) personnel and vehicles (-$8 billion).3 The bill reportedly aims to establish the capacity to deport up to 1 million individuals annually.1
Investing in Agriculture:
The agricultural sector is set to receive increased federal support under H.R.1.
Overall spending for agriculture-facing programs is projected to increase by $56.6 billion over the FY2025-FY2034 period.8
A significant portion of this increase, $52.3 billion, is dedicated to enhancing the farm safety net. This includes higher reference prices under the Price Loss Coverage (PLC) program, adjusted formulas for Agricultural Risk Coverage (ARC), and expanded crop insurance support.8
The bill also increases Tier I coverage eligibility under the Dairy Margin Coverage (DMC) program, provides additional support for specialty crop growers, and boosts funding for animal disease prevention and response efforts.8
However, within the agriculture title, there is a net reduction of $1.8 billion in conservation spending, primarily due to the rescission of some funds previously allocated under the Inflation Reduction Act.8
Other Significant Programmatic Adjustments:
Artificial Intelligence (AI) Regulation: H.R.1 imposes a 10-year moratorium on state-level legislation and enforcement actions aimed at regulating artificial intelligence.1
Judicial Oversight: The bill includes provisions that restrict the ability of federal courts to hold federal officials in contempt for failure to comply with judicial orders under certain circumstances.1
Table 3: Major Programmatic Spending Changes in H.R.1: Estimated Increases and Decreases (FY2025-FY2034)
| Program Area | Estimated Spending Change (Billions of Dollars) | Source(s) |
|---|---|---|
| Defense (Armed Services Committee) | +144 | 3 |
| Border Security (Homeland Security Committee) | +79 | 3 |
| Agriculture Programs | +56.6 | 8 |
| SNAP (Supplemental Nutrition Assistance Program) | Significant Cuts (Quantification Varies) | 1 |
| Medicaid | Significant Cuts & Restructuring (Leads to 10.9M more uninsured) | 1 |
| Education (Federal Student Aid) | Cuts (e.g., end of subsidized loans) | 1 |
| FERS Annuity Supplement | -10.0 (Savings) | 9 |
| Clean Energy Programs (IRA Rescissions - Spending Side) | Net Reduction (Part of Offsets in Table 2) | 1 |
| Conservation Spending (within Agriculture) | -1.8 (Net Reduction) | 8 |
Note: "Significant Cuts" for SNAP and Medicaid reflect the bill's intent and CBO's projected impact on coverage, though precise 10-year outlay reduction figures for these specific programs from a single source are complex due to interactions with tax provisions and eligibility changes. The $313 billion figure for SNAP mentioned in an amendment 6 indicates the scale of potential cuts discussed.
Several provisions within H.R.1, particularly those affecting SNAP and Medicaid, are structured to impose new operational requirements or shift financial responsibilities directly onto state governments. For instance, the proposal to make states liable for 5% of SNAP benefit costs and 75% of administrative expenses represents a direct transfer of financial burden.1 Similarly, the introduction of new work requirements for Medicaid 1 and the mandate for more frequent eligibility redeterminations 4 will inevitably impose substantial administrative tasks and associated costs on states for implementation and ongoing monitoring. Compounding these pressures, the moratorium on new or increased provider taxes (Section 44132 4) restricts a key mechanism states have used to finance their share of Medicaid expenditures. This limitation could exacerbate state funding shortfalls if federal contributions are simultaneously constrained or if overall program costs continue to rise. While some elements of H.R.1, such as reimbursements for state border security efforts 3, do provide funds to states, the predominant pattern observed in the social program titles suggests an increase in unfunded or underfunded mandates. Consequently, states are likely to face difficult fiscal choices, potentially leading to increased state-level spending, cuts to other state-funded services, considerations of state tax increases, or reductions in program generosity beyond federally mandated minimums. Such developments could also foster greater disparities in program administration and benefit levels across different states.
5. Distributional Impact: Identifying Beneficiaries and Affected Parties
The sweeping changes proposed in H.R.1 are anticipated to create distinct sets of beneficiaries and adversely affected parties across the U.S. economy and populace.
Beneficiaries of Increased Funding and Tax Benefits:
Defense Sector: Increased military appropriations are expected to benefit defense contractors and associated industries involved in shipbuilding, aerospace, munitions, and advanced weapons systems development.1
Border Security Sector: Companies engaged in the construction of physical barriers, surveillance technology, and staffing for border enforcement agencies will likely see increased opportunities due to enhanced funding.1
Agricultural Sector: Farmers, ranchers, and related agricultural businesses are poised to benefit from an enhanced farm safety net, higher commodity reference prices, expanded crop insurance programs, and specific supports for dairy and specialty crops.8
Taxpayers Benefiting from TCJA Extensions: The extension of TCJA provisions, such as lower individual and corporate income tax rates and the expanded pass-through business income deduction, will generally benefit corporations and higher-income individuals. The extension of the increased estate tax exclusion specifically advantages wealthy estates.2 While the increased standard deduction offers broader relief, the overall thrust of these extensions leans towards higher-income brackets.
Taxpayers Benefiting from New Deductions/Exemptions: Individuals who receive a significant portion of their income from tips or overtime pay will benefit from the temporary exemption of these earnings from federal income tax. Seniors will benefit from a higher standard deduction, and individuals with qualifying car loans will see a new interest deduction.2
Investors in Opportunity Zones: The creation of a new round of Opportunity Zone investment opportunities is designed to attract capital to designated economically distressed areas, offering tax advantages to investors.2
Parties Facing Budget Cuts or Adverse Programmatic Changes:
SNAP Recipients: Individuals and families relying on SNAP are likely to face reduced benefits or loss of eligibility due to the imposition of stricter work requirements, changes to eligibility calculations (such as the elimination of BBCE), and the potential for states to reduce benefits due to increased cost-sharing.1
Medicaid Recipients: A significant number of current and potential Medicaid beneficiaries are projected to lose coverage. The CBO estimates an increase of 10.9 million uninsured individuals by 2034 due to H.R.1, with 7.8 million of these stemming from Medicaid changes alone.4 This is primarily attributed to new work requirements, stricter and more frequent income verification, and other eligibility modifications. Additionally, access to specific services like gender-affirming care may be eliminated, and the defunding of certain family planning providers could reduce access to a broader range of healthcare services.1
Students and Borrowers: The termination of Federal Direct subsidized loans for undergraduate students will increase the cost of borrowing for higher education. Changes to Pell Grant eligibility criteria could also affect access for some students, despite the introduction of Workforce Pell Grants.1
Federal Employees (New Retirees): The elimination of the FERS annuity supplement for most new retirees will reduce their expected retirement income prior to Social Security eligibility.9
Clean Energy Sector: Businesses and individuals involved in the clean energy sector, including manufacturing, installation, and adoption of renewable energy technologies and electric vehicles, will face reduced incentives and support due to the repeal or accelerated phase-out of IRA tax credits.1
State Governments: States are likely to face increased administrative and financial burdens, particularly in administering SNAP and Medicaid under the new federal rules and cost-sharing arrangements.1
The confluence of these policy choices—directing substantial tax benefits that disproportionately favor higher-income individuals and corporations, while simultaneously curtailing access to essential services like food assistance and healthcare for lower-income populations—carries a strong potential to widen existing income and health disparities. The major tax cut extensions, including those for individual and corporate rates, the pass-through deduction, and the estate tax, are structured in a way that provides greater financial advantages to those at the upper end of the economic spectrum.2 While the expansion of the standard deduction offers some broad relief, the overall balance of the tax changes leans towards benefiting higher incomes. Concurrently, the cuts and new restrictions imposed on SNAP and Medicaid, including the introduction of work requirements, are anticipated to primarily impact low-income individuals and families. This could lead to increased food insecurity and diminished access to necessary medical care.1 The CBO's projection of a significant rise in the number of uninsured Americans, predominantly due to changes in Medicaid eligibility 4—a program specifically designed to serve vulnerable populations—underscores this concern. Furthermore, reduced investment in clean energy initiatives could disproportionately affect communities already burdened by pollution, which are often lower-income and minority communities, if it impedes the transition to cleaner energy sources and technologies. The collective impact of these policies suggests a channeling of resources upwards through tax reductions, coupled with a reduction in support for the social safety net, thereby creating conditions conducive to increased inequality in both economic well-being and health outcomes. The proposal of Amendment 288 by Representative Pressley, which called for a GAO report on the demographic impacts of the bill 6, signals an awareness and concern among some legislators regarding these potential distributional consequences.
6. A Decade in Review: H.R.1 in Historical Budgetary Context (FY2015-FY2024)
To fully appreciate the potential fiscal ramifications of H.R.1, it is instructive to examine its proposals against the backdrop of federal budgetary trends over the preceding decade, fiscal years 2015 through 2024. Data from the Congressional Budget Office provides a clear picture of revenues, outlays, deficits, and spending patterns during this period.10
Federal Fiscal Trends (FY2015-FY2024):
The decade preceding the introduction of H.R.1 was marked by persistent federal deficits. Total federal revenues generally increased over the period, from $3.25 trillion in FY2015 to a projected $4.92 trillion in FY2024. However, total outlays grew more substantially, from $3.69 trillion in FY2015 to a projected $6.75 trillion in FY2024. Consequently, the annual deficit fluctuated but remained significant, starting at -$442 billion in FY2015, increasing after the implementation of the Tax Cuts and Jobs Act of 2017 (e.g., reaching -$984 billion in FY2019 pre-pandemic), and experiencing an unprecedented surge during the COVID-19 pandemic, peaking at -$3.13 trillion in FY2020. Even as pandemic-related emergency spending subsided, deficits remained elevated, with FY2023 recording a deficit of -$1.69 trillion and FY2024 projected at -$1.83 trillion.11
Table 4: Federal Revenue, Outlays, and Deficit/Surplus (FY2015-FY2024) (Billions of Dollars)
| Fiscal Year | Total Revenues | Total Outlays | Deficit (-) / Surplus (+) | Source(s) |
|---|---|---|---|---|
| 2015 | 3,249.890 | 3,691.850 | -441.960 | 11 |
| 2016 | 3,267.965 | 3,852.615 | -584.650 | 11 |
| 2017 | 3,316.184 | 3,981.634 | -665.450 | 11 |
| 2018 | 3,329.907 | 4,108.981 | -779.074 | 11 |
| 2019 | 3,463.364 | 4,446.952 | -983.588 | 11 |
| 2020 | 3,421.164 | 6,553.620 | -3,132.456 | 11 |
| 2021 | 4,047.111 | 6,822.461 | -2,775.350 | 11 |
| 2022 | 4,897.399 | 6,273.259 | -1,375.860 | 11 |
| 2023 | 4,440.947 | 6,134.672 | -1,693.725 | 11 |
| 2024 (Est.) | 4,918.104 | 6,750.485 | -1,832.381 | 11 |
Spending Trends for Key Program Areas (FY2015-FY2024):
Outlays for major program categories also saw distinct trends over the decade 11:
Defense Discretionary Spending: Increased from $583 billion in FY2015 to a projected $850 billion in FY2024.
Nondefense Discretionary Spending: Grew from $589 billion in FY2015 to a projected $960 billion in FY2024.
Social Security: Outlays rose steadily from $882 billion in FY2015 to a projected $1.45 trillion in FY2024, driven by an aging population and cost-of-living adjustments.
Medicare: Spending increased from $634 billion in FY2015 to a projected $1.04 trillion in FY2024, reflecting rising healthcare costs and beneficiary numbers.
Medicaid: Outlays grew from $350 billion in FY2015 to a projected $618 billion in FY2024, influenced by program expansions and healthcare cost inflation.
Income Security (including SNAP): This category showed more volatility, influenced by economic conditions and policy changes. It was $301 billion in FY2015, surged to $1.38 trillion in FY2021 due to pandemic relief, and was projected at $370 billion for FY2024.
Table 5: Historical Outlays for Major Program Categories (FY2015-FY2024) (Billions of Dollars)
| Defense Discretionary | Nondefense Discretionary | Social Security | Medicare | Medicaid | Income Security | Source(s) | |
|---|---|---|---|---|---|---|---|
| Fiscal Year | |||||||
| 2015 | 583.385 | 588.756 | 881.891 | 634.092 | 349.762 | 301.012 | 11 |
| 2016 | 584.831 | 600.424 | 910.282 | 692.491 | 368.280 | 303.705 | 11 |
| 2017 | 590.192 | 610.118 | 939.204 | 702.286 | 374.682 | 293.754 | 11 |
| 2018 | 622.689 | 638.828 | 982.015 | 704.501 | 389.157 | 285.184 | 11 |
| 2019 | 676.370 | 661.630 | 1,038.489 | 775.370 | 409.421 | 302.517 | 11 |
| 2020 | 713.822 | 914.061 | 1,089.889 | 912.116 | 458.468 | 1,050.897 | 11 |
| 2021 | 741.607 | 894.802 | 1,128.827 | 867.676 | 520.588 | 1,376.242 | 11 |
| 2022 | 752.128 | 912.422 | 1,212.487 | 974.649 | 591.949 | 580.670 | 11 |
| 2023 | 806.191 | 911.941 | 1,347.961 | 1,015.870 | 615.772 | 448.100 | 11 |
| 2024 (Est.) | 849.950 | 959.847 | 1,454.424 | 1,043.789 | 617.517 | 370.210 | 11 |
Comparative Analysis:
H.R.1's projected deficit increase of several trillion dollars over the next decade would add substantially to the already high deficits experienced in the FY2015-FY2024 period.1 In terms of spending priorities, H.R.1 appears to accelerate the trend of increasing defense expenditures observed in the latter half of the 2015-2024 decade. Conversely, its approach to social programs like Medicaid and SNAP—focusing on cost containment and stricter eligibility—represents a significant departure from the growth patterns seen in these programs over the past ten years, during which Medicaid outlays, for instance, grew considerably.11
The historical data reveal a federal budget already under considerable strain, characterized by persistent and growing deficits even before the fiscal shocks of the COVID-19 pandemic. The TCJA of 2017, for example, coincided with an increase in the deficit from -$665 billion in FY2017 to -$984 billion in FY2019, prior to the pandemic's full impact.11 Post-pandemic, deficits have remained at historically high levels, exceeding $1.5 trillion annually in FY2023 and FY2024.11 H.R.1, by proposing to make permanent many of the tax cuts that contributed to earlier deficit growth and by layering on substantial new spending in certain areas without fully commensurate offsets, appears set to exacerbate these pre-existing fiscal imbalances. The bill's primary mechanisms for increasing the deficit—namely, the long-term extension of TCJA tax provisions and new, sustained spending commitments—are not temporary fiscal measures. As such, H.R.1 does not chart a course towards fiscal consolidation but rather seems to deepen the existing structural gap between federal revenues and expenditures, suggesting a long-term commitment to policies that are likely to widen this imbalance further.
7. Concluding Analysis and Forward Outlook
The "One Big Beautiful Bill Act" (H.R.1, 119th Congress) represents a legislative effort of considerable scale and ambition, poised to enact profound changes across the U.S. federal budget and myriad government programs. This analysis indicates that its most critical impacts will be a substantial increase in the federal deficit over the next decade and a significant transformation of federal program priorities, generally shifting resources away from social welfare and environmental initiatives towards broad tax reductions and enhanced security spending.
The projected multi-trillion dollar increase in the national debt carries potential macroeconomic consequences. While proponents of the bill's tax cuts may argue for their stimulative effect on economic growth, concerns exist regarding the long-term burden of increased national debt, potential upward pressure on interest rates, and the crowding out of private investment. The bill's approach to fiscal policy also raises questions about intergenerational equity, as future taxpayers will ultimately bear the responsibility for servicing the accumulated debt.
Legislatively, H.R.1 has successfully passed the House of Representatives but now faces consideration in the Senate.8 While the budget reconciliation process provides certain procedural advantages, the final form of the legislation, if it is enacted, may differ from the House-passed version due to Senate amendments or negotiations. The politically charged nature of the bill is evident not only in its aspirational title but also in the sharply contrasting views expressed through proposed amendments, such as the one seeking to rename it the “One Big Billionaire Bailout Act,” reflecting deep divisions over its intended beneficiaries and overall impact.6
The development and passage of H.R.1 through the House largely along party lines 1 underscore the challenges of achieving fiscally responsible outcomes in a highly polarized political environment. The bill’s emphasis on ideologically aligned priorities—such as broad tax reductions mirroring the TCJA, increased defense spending, and conservative reforms to social programs through new restrictions—coupled with its projected significant addition to the national debt 1, suggests that immediate deficit reduction was not the primary objective in its formulation. The extensive list of proposed amendments, predominantly from the minority party, which aimed to reverse or mitigate many of the bill's core fiscal and programmatic directions 6, further illustrates the fundamental disagreements on policy and fiscal priorities. This legislative dynamic suggests that major fiscal policy is increasingly shaped by partisan objectives rather than by a bipartisan consensus on addressing the nation's long-term fiscal challenges. The potential for significant alterations in the Senate 8 reinforces the notion of an ongoing political contest rather than a unified approach to federal budgeting, making the path to sustained fiscal stability increasingly complex.
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